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Capital Lease in Accounting: Definition, Requirements & Example

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

Which of the following terms in a lease WOULD NOT result in capital lease accounting treatment?

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1. What distinguishes a capital lease from an operating lease?

2. Why would a business owner enter into a capital lease instead of an operating lease?

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About This Quiz & Worksheet

Use this worksheet and quiz combo to gauge your understanding of capital lease. You will be quizzed on why a company would want to enter into a capital lease and how this lease differs from an operating lease.

Quiz & Worksheet Goals

This quiz and worksheet can help you review:

  • Industries that might have leased assets considered capital lease
  • Benefits of entering into a capital lease
  • Differences between capital lease and operating lease
  • Things that result in a capital lease accounting treatment

Skills Practiced

  • Reading comprehension - ensure that you draw the most important information from the related lesson on capital leases
  • Information recall - access the knowledge you have gained regarding the point of entering into a capital lease
  • Distinguishing differences - compare and contrast main topics, such as operating lease and capital lease

Additional Learning

To learn more about capital leases, check out the corresponding lesson called Capital Lease in Accounting: Definition, Requirements & Example. This lesson will help you:

  • Determine what a capital lease is
  • Compare and contrast capital leases and operating leases
  • Define present value
  • Understand what needs to be figured out for capital leases
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